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How long does it take in theory to get a mortgage?

(21 Posts)
mizu Thu 06-Mar-14 15:03:13

I am sure this has been done before but can't find an answer on here.

We are 1st time buyers and have no idea how it all works.

Seen a flat that is within our budget (prob a bit small but in great location and where we want to be school wise). Going to view on Saturday AM.

We have no mortgage in place as yet.

I have had a quick look on money supermarket. I know this will sound really thick but do I just contact the building society/bank?

We have some savings and no debt. Excellent credit history. Does this speed things up?

Thanks in advance for anyone patient enough to answer grin

peggyundercrackers Thu 06-Mar-14 15:08:07

you just go into bank and make an appoint with someone for a mortgage, when you go in they will normally tell you there and then if you will be accepted. you cna also do it over the phone with banks like first direct and they normally give you an answer there and then. after that its just a case os signing all the documentation and you give them a date you need the money released. its not a difficult process.

StarsAbove Thu 06-Mar-14 15:43:28

I used a mortgage broker who didn't charge a fee (he got commission from the mortgage providers) and didn't ever meet him, it was all done by phone!

hyperspacebug Thu 06-Mar-14 16:01:05

Yes, please just contact the bank, saying you had offer accepted. Tell them you after their deal. 5 year fixed rate? whatever. They will tell you how to proceed.

You can do it even before making any offers, but 'mortgage agreed in principle' often has time limit. We ended up house-hunting for longer than we wanted, so we ran out of agreement twice.

mizu Thu 06-Mar-14 16:12:17

Thanks all. I did go into my bank last week and they just showed me some figures. The rate was 5%.

On moneysupermarket the deal of the day was somewhere that did 4.89% for first time buyers.

Does it really matter who i go with if we are first time buyers with a small deposit on an affordable property?

mizu Thu 06-Mar-14 16:13:08

We have �7000 saved and the property is �125,000 btw

Johnogroats Thu 06-Mar-14 16:18:18

I would contact a mortgage advisor - see if you can get one recommended. Also check out money supermarket and the finance pages of the Sunday Times - they will have current rates. It does take time (I have heard up to 3 months, but am sure that is probably worst case scenario).

As a first time buyer, we walked into first bank and got signed up for a 7 year fix. In hindsight, it wasn't a great deal. Think about fixing so you have certainty, and given rates are so low, I would go for 5 years.

ihategeorgeosborne Thu 06-Mar-14 18:25:37

Hi mizu, we are FTBs and just applied for our first mortgage. We thought it would take ages and weren't sure we'd be accepted. It was very quick. We found the deal we wanted, the best we could get with a 10% deposit. It was 4.29% with the Post Office, fixed for 5 years. They approved us straight away! The under writers rang dh at work the next day and asked him to send in confirmation of payslips, P60, etc. We then had survey done and mortgage offer came in the post straight away. It has been amazingly quick, much quicker than I thought.

mizu Thu 06-Mar-14 18:58:48

thanks ihategeorgeosborne that sounds positive.

We havent quite got 10% so will not get quite as good a deal but it does seem that if you only have a small deposit the mortgages are pretty much the same.

Good to know it can be done.

Neverhere Thu 06-Mar-14 19:47:18

Just to me thou know we got told not to apply for the 5% mortgage from one bank (too low income despite all other sources saying otherwise) and the other couldn't give us an appointment for 2 months for a 5% deposit.

In the end we did a 10% deposit in one income (so less than half earnings compared to what we had said for the 5% deposit) and sorted in a few weeks.

The banks are still very wary of 5% deposit in our experience. Though we started looking at mortgages when the scheme had just been launched.

Flossiechops Thu 06-Mar-14 20:08:17

ihategeoge we have just done the same. Very impressed with the Post Office. Op you need an agreement in principle before an estate agent will let you offer I think (post office do this). Then once you have an offer accepted you proceed to a full application. We had ours approved within seconds. We had the best rate we could find with a 25% deposit - 1.88, all plain sailing & no financial advisor needed.

Toomuch2young Thu 06-Mar-14 20:17:22

You can get an online mortgage in principal.

We got ours on hsbc so we knew what we were looking at. We then went to view properties and then put an offer in. When accepted we rang hsbc and sorted mortgage over phone in 1.5 hours just having to send wage slips etc off.

Maybe you will be eligible for the help to buy scheme?
We were lucky enough to have just over 10% deposit which most insist on. Have you considered a shared equity property? Some great deals about.

ihategeorgeosborne Thu 06-Mar-14 21:18:52

yes, I can definitely vouch for the post office. They have been very efficient. They are bank of Ireland. We were going to use HSBC (our bank), but then they increased all their interest rates when we were about to apply and it turned out that the post office was the best rate for us. I'm very envious of your rate Flossie. I would be sooooo happy to be paying that much interest. I am envy . 4.29% was the best rate we could get, but when you compare it with bank rate it still feels massive. You should shop around mizu . Make sure you get the best deal for you. Also you need to factor in arrangement fees. They can be big, particularly for long term fixes. Although, I think fixing for 5 years is a good idea at the moment as rates will go up in the next couple of years.

mizu Thu 06-Mar-14 21:53:26

We weren't considering buying for another year or so. But went to the bank and got quite depressed at how much we would need as a deposit and how much our repayments would be.

This was on £170,000.

Now we have seen a flat in the much sought after area we want where our DDs could go to secondary in a couple of years and for £125,000.

Not the property we would ideally like but am really fed up of renting and would always choose location over house.

So repayments would be affordable.

Our bank were happy to lend us more than £170,000 with a 5% deposit.

Just need to find the best rate, 5 years would cost more in repayments than 3 years I guess.

ihategeorgeosborne Thu 06-Mar-14 22:08:16

I know what you mean mizu. It is shit really. We have been renting forever and we are 42 now, with 3 dc. Our landlord has served us notice on the house we are currently renting as he is moving back in to the property. We were quite fortunate with our rent as we're not paying market rent, as our landlord just wanted a family to take care of the house, as he had no mortgage. The cheaper rent has enabled us to save a 10% deposit, although taken years to do. We looked at other rentals and they are about £1200 -£1400 a month for a 3 bed where we live. We don't want to move as dc are happy at school and we are very happy here. We decided that the time had come to buy. I do feel that it is a big step and I am terrified of job loss, interest rate rises, etc, which is why we've fixed for 5 years. Also, we should be earning more in 5 years, hopefully. It's certainly a worry. I have thought houses are over-priced for years now, but they seem to be going up like wild fire round here. The house we are buying is a good price for the area and we could live there forever and the mortgage would be no more than the rent we would pay to live in an equivalent house. It just feels insane that houses are so expensive.

mizu Fri 07-Mar-14 07:45:16

Same here ihategeorgeosbourne, renting forever too and we have rented the same place for over 6 years and pay below what it should be as it needs work doing to it (understatement).

May still wait a bit longer but we will view the flat tomorrow. Didnt think we would ever be buying a flat - and dds will have to still share a room but the location is great and not too far from where we are now.

The problem is to rent in that area costs loads more than we are paying now. So to move and continue renting would mean not saving anything.

Will have to sacrifice a garden though (drying washing outside is one of my fav chores) and it will be a bit of a squeeze.

But like you said, time is not on our side, i am 41, DH a bit younger and it has taken us 2 years to save what we have saved.

Can't believe house prices are supposed to be going up again [shocked]

hyperspacebug Fri 07-Mar-14 21:10:39

Feb/mar is quiet time for banks so if you get offer accepted, things may turn around fast!

Good luck!

MrsA2 Sat 08-Mar-14 08:35:52

If you're looking at 5% deposit I would strongly recommend a mortgage adviser - you need an independent one (not part of an estate agent/bank) who takes their commission from any mortgage you get and so doesn't charge you. The initial conversation should be no obligation so you have nothing to lose.

They will be able to guide you on which banks/building societies are the most generous and least difficult for buyers with a low deposit.

As previous posters have said, step 1 is to get an agreement in principle ASAP, it doesn't even have to be with the company you actually take the mortgage with. Try to only get one though, as every time you do they check your credit rating and that impacts your credit score (ridiculous I know). You will struggle to make an offer on a property that gets taken seriously without an agreement in principle.

Our mortgage is going through at the moment. We were told to expect it to take 4-8 weeks, it looks like we are going to be close to 4 rather than 8 but my fingers are staying firmly crossed for now!

Good luck, it's an exciting time buying your first house.

mizu Sat 08-Mar-14 20:02:11

Thanks for replies. Will take it all on board however the flat we were due to view this morning was sold on Friday sad and I only found out cos the property was no longer on the website.

Rang the estate agent at 5 pm and they said it had been sold and oh hadn't anyone let you know sad

Properties that we can afford don't come up very often in that area -about a mile from where we are now - there was another a few weeks ago and it was sold in 5 days for above asking price. Nothing else at mo anywhere near our measly budget.

eurochick Sat 08-Mar-14 20:08:33

Remember that you will need moving and legal costs as well as the deposit.

Sorry you lost your flat. A tip when you next make an offer is to say that it is conditional on the property being taken off the market immediately.

ihategeorgeosborne Sat 08-Mar-14 20:35:02

Sorry to hear that mizu sad . You will find something soon. Perhaps this one just wasn't meant to be. We looked at a few before the one we are now buying. We were forced into buying this in a way, as landlord wants his house back and we have to move. We have managed to find somewhere round the corner, and because we are having a private sale, i.e. no estate agent for the sellers, they have knocked a few grand off for us and we haven't had all the estate agent hassle and smarmy patter. I never dreamed we'd be in this situation a few months ago, so things can change for the better. Good luck smile

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